Our last blog built on the Department of Labor’s new rules on overtime to remind business owners of some basic principles, and warn of some pitfalls.
A recent Supreme Court decision highlighted another set of shoals in the legal waters of Overtime Bay. Once a company becomes subject to the Fair Labor Standard Act or FLSA, it has record-keeping duties in addition to having to pay overtime to most employees working over 40 hours a week.
The consequences of this less-known aspect of overtime law is that whether all your employees are paid overtime or none, you have duties under the FLSA. One of the most important ones is to keep track of employees’ hours. If the business fails to do that, the Courts will rely on other kinds of evidence, nearly invariably less friendly to the employer, in case any dispute arises.
Without company records, Courts will take into consideration the employee’s word on how long they worked. Or they will rely on the report of a stopwatch-wielding “expert” to determine how long a task takes and how long employees doing it repeatedly likely worked. This type of statistical evidence is the very one the Supreme Court allowed a few weeks back.
Most smaller businesses like to keep a casual, even family-style atmosphere. Their culture is not one of paper-pushing, of punching in and punching out. Yet as they grow, failing to keep accurate time records can have devastating consequences. This is the kind of danger businesses who have a good relationship with their attorney will know to avoid.